Stop Making Plans, Start Making Decisions
DECISION MAKING
In most companies, strategic planning isn’t about making decisions.
It’s about documenting choices that have already been made, often haphazardly.
Leading firms are rethinking their approach to strategy development so they can make more, better, and faster decisions.
STOP MAKING PLANS
START MAKING
DECISIONS
by Michael C. Mankins and Richard Steele
I
S STRATEGIC PLANNING COMPLETELY USELESS? That was the question the CEO of a global manufacturer recently asked himself. Two years earlier, he had launched an ambitious overhaul of the company’s planning process. The old approach, which required business-unit heads to make regular presentations to the firm’s executive committee, had broken down entirely. The ExCom members – the CEO, COO, CFO,
CTO, and head of HR – had grown tired of sitting through endless PowerPoint presentations that provided them few opportunities to challenge the business units’ assumptions or influence their strategies. And the unit heads had complained that the ExCom reviews were long on exhortation but short on executable advice. Worse, the reviews led to very few worthwhile decisions.
76
harvard business review
january 2006
77
YEL MAG CYAN BLACK
GEORGE BATES
DECISION MAKING
The revamped process incorporated state-of-the-art thinking about strategic planning. To avoid information overload, it limited each business to 15 “high-impact” exhibits describing the unit’s strategy. To ensure thoughtful discussions, it required that all presentations and supporting materials be distributed to the ExCom at least a week in advance. The review sessions themselves were restructured to allow ample time for give-and-take between the corporate team and the business-unit executives. And rather than force the unit heads to traipse off to headquarters for meetings, the ExCom agreed to spend an unprecedented six weeks each spring visiting all 22 units for daylong sessions. The intent was to
In most companies, strategic planning isn’t about making decisions.
It’s about documenting choices that have already been made, often haphazardly.
Leading firms are rethinking their approach to strategy development so they can make more, better, and faster decisions.
STOP MAKING PLANS
START MAKING
DECISIONS
by Michael C. Mankins and Richard Steele
I
S STRATEGIC PLANNING COMPLETELY USELESS? That was the question the CEO of a global manufacturer recently asked himself. Two years earlier, he had launched an ambitious overhaul of the company’s planning process. The old approach, which required business-unit heads to make regular presentations to the firm’s executive committee, had broken down entirely. The ExCom members – the CEO, COO, CFO,
CTO, and head of HR – had grown tired of sitting through endless PowerPoint presentations that provided them few opportunities to challenge the business units’ assumptions or influence their strategies. And the unit heads had complained that the ExCom reviews were long on exhortation but short on executable advice. Worse, the reviews led to very few worthwhile decisions.
76
harvard business review
january 2006
77
YEL MAG CYAN BLACK
GEORGE BATES
DECISION MAKING
The revamped process incorporated state-of-the-art thinking about strategic planning. To avoid information overload, it limited each business to 15 “high-impact” exhibits describing the unit’s strategy. To ensure thoughtful discussions, it required that all presentations and supporting materials be distributed to the ExCom at least a week in advance. The review sessions themselves were restructured to allow ample time for give-and-take between the corporate team and the business-unit executives. And rather than force the unit heads to traipse off to headquarters for meetings, the ExCom agreed to spend an unprecedented six weeks each spring visiting all 22 units for daylong sessions. The intent was to